In Palau and everywhere in the world, coastal coral reefs are threatened by sedimentation resulting from land clearing in the watersheds. Palau’s largest island of Babeldaob is particularly susceptible to significant erosion due to its steep topography, high rainfall, and highly erodible volcanic soil. Previous studies have shown the damaging impacts of sedimentation on coral reefs around Babeldaob Island. Related studies conducted in Micronesia have also documented that mangroves can trap about 30% of the fine eroded sediment from land. This paper examines the sediment trapping capability of cultivated wetlands, in particular taro (Colocasia esculenta) fields, which are natural wetlands used to grow taro, a main staple crop for the population. A 7-months long field study was undertaken to quantify the sediment accumulation rate for taro fields and to determine their sediment trapping efficiency. The results showed that the taro fields were able to trap on average 90% of sediment, therefore sheltering coastal coral reefs and their fisheries from the negative impacts of terrestrial runoff. Based on the results of this study, we suggest that the combined sediment trapping capacity of taro fields and mangroves helped reduce sedimentation on coral reefs around Babeldaob Island. This enabled human settlement for over 2000 years on a small Pacific Island with the main staple food being taro for starch and reef fish for protein.